Usama, Shahid and Hassan are partners in a partnership firm. With an agreement among them, they decided that no partner will have the authority to buy or sell goods above Rs. 20,000 without other partners’ consent. Unaware of this provision (restriction), Ali sold goods worth Rs. 45,000 to Shahid who did not inform (or consult with) other partners. According to Partnership Act, explain whether the partnership firm and its partners are liable to Ali under the circumstances mentioned above.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Usama, Shahid and Hassan are partners in a partnership firm. With an agreement among them, they decided that no partner will have the authority to buy or sell goods above Rs. 20,000 without other partners’ consent. Unaware of this provision (restriction), Ali sold goods worth Rs. 45,000 to Shahid who did not inform (or consult with) other partners.

According to Partnership Act, explain whether the partnership firm and its partners are liable to Ali under the circumstances mentioned above.

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